With rigorous economic research and practical policy solutions, we focus on the issues and institutions that are critical to global development. Explore our core themes and topics to learn more about our work.
In timely and incisive analysis, our experts parse the latest development news and devise practical solutions to new and emerging challenges. Our events convene the top thinkers and doers in global development.
Global poverty is decreasing, but billions of people still do not have the resources they need to survive and thrive. Economic growth can reduce poverty, but it can also drive inequality that generates social and economic problems. And efforts at domestic resource mobilization through taxation, though critical to funding the SDGs, can negatively impact the poor. In this work, CGD experts offer suggestions to improve how the world tracks and tackles poverty and the inequities the international global system creates.
Get Poverty, Inequality, and Growth Updates
CGD experts offer timely research, analysis, and policy ideas for the world’s emerging development challenges. Sign up to get the latest updates from CGD!
In this working paper, the authors shed light on systemic problems of variability and valuation in the Penn World Table GDP estimates that distort cross-country comparisons of the data. They propose creating a new chained series that values all data at PPP prices and makes better use of disaggregated data for different benchmark years to overcome the limitations.
On this edition of the Wonkcast, I am joined by senior fellow Liliana Rojas-Suarez, who discusses her work as co-chair of the CGD Task Force on Access to Financial Services. Financial regulation—and access—is a hot topic right now, as countries try to reduce the chance of future financial crises, while also ensuring access to financial services. The US House and Senate are currently wrestling with exactly what a revamped US regulatory system should look like.
Liliana explains that the balance between financial stability and increased access to finance is at the root of these debates, and in fact was central to the financial collapse itself. "Even in the United States," she explains, "many people did not have sufficient access to finance, and, well, nobody wanted to stop the provision of financial services. And that was creating a bubble that ended up in the largest crisis that we have seen in recent history."
However, shifting too far the other way-- trying to ensure stability through strict banking regulation-- could deny billions of people around the world access to basic financial services (see David Roodman’s recent blog post examining recent estimates of the number of people who are financially un-served).
Liliana and her task force came up with a set of ten principles that can help policymakers address that dilemma. "The unique thing about the principles is that it takes the forest, not just the trees," Liliana tells me. "It doesn't focus on one part of regulation, it basically looks at the entire forest of financial regulation and says, 'OK we want the system to be stable, but we also want the system to provide financial access.'"
The principles fall into three general categories-- financial infrastructure, financial regulation, and other government policies. Listen to the podcast to hear Liliana explain them, and go read the Task Force's full report introducing the principles here. Have something to add to our discussion? Ideas for future interviews? Post a comment below. If you use iTunes, you can subscribe to get new episodes delivered straight to your computer every week.
What are the benefits of focusing specifically on girls when we invest in development? My guest this week is Ruth Levine, an expert on health and education who for the past two years has focused much of her work on adolescent girls. She's the co-author of a recently released CGD report titled Start with a Girl: A New Agenda for Global Health. In our Wonkcast, she outlines the agenda and explains why it's so critical.
"Women and girls in many senses really hold the key not only for their own health but for the health of their children and their broader communities," Ruth tells me. Recognizing that fact and directing our investments accordingly, she says, can lead to better solutions for a wide range of problems—everything from economic development to HIV/AIDS.
"In high [AIDS] burden countries, if you look at who is getting infected, three quarters of HIV infected young people are girls."
Bringing those numbers and overall AIDS infection rates down, Ruth explains, will require identifying and addressing the social dynamics that make girls more vulnerable in the first place.
The Start with a Girl agenda explains what a comprehensive girl-focused public health policy might look like. Among its eight agenda items, it recommends working to eliminate child marriage, focusing HIV prevention efforts on adolescent girls, and fostering national commitments in selected developing countries to providing healthcare to girls. The full agenda as well as a video of the report's well-attended launch are available here.
Listen to the Wonkcast to hear our full conversation. Have something to add? Ideas for future interviews? Post a comment below. If you use iTunes, you can subscribe to get new episodes delivered straight to your computer every week. Ruth is beginning to Tweet—sign on to follow her on Twitter!
During a panel discussion we hosted at the World Bank and IMF annual meetings in Istanbul last month on mutual accountability and outcomes in aid, Max Lawson from Oxfam, in referring to COD Aid, said that CGD appears to have more effective publicity strategies and reach than the European Commission. While we do have a (small but) stellar communications team, our ideas spread far primarily because other organizations are seriously engaged in exploring and debating new ideas like the ones we have proposed (otherwise our tiny team would be sleepless, to say the least!).
CAFOD’s attention to the idea of COD Aid is a helpful contribution to the ongoing discussion about how to improve foreign aid, especially because COD Aid is a form of foreign assistance that can easily accommodate joint collaboration between official and private funders.
CAFOD’s briefing paper provides a good overview of the advantages of COD Aid and raises some legitimate concerns. Our forthcoming book, Cash on Delivery: A New Approach to Foreign Aid with an Application to Primary Schooling, and responses to comments we’ve received in a variety of workshops and interviews address many of these concerns. However, more importantly, we have found that many of the anticipated problems are easier to resolve when the discussion moves away from the general concept toward the opportunities it presents in the specific context of a given country or sector. That’s why we’ve been supportive of government-led dialogue on exploring the approach in interested countries.
The briefing ends by recommending that:
COD Aid should be used to complement, not substitute, existing development support. We agree, and believe that a COD Aid agreement could actually make existing technical assistance and education investments more effective because COD Aid provides different incentives and opportunities than existing forms of foreign aid.
Funders should offer COD Aid payments of varying levels that are calibrated to social and economic factors that may change the cost of achieving the desired outcome. In offering this recommendation, CAFOD is voicing a legitimate concern that governments might respond to a single incentive (such as a fixed payment per child completing primary school) by focusing on those who are easiest to reach and neglecting those who are more vulnerable. This concern arises from the reasonable assumption that the marginal cost is higher of reaching the more vulnerable. However, one of the things that we learned through our consultations is that setting the appropriate amount of the COD Aid payment has less to do with the cost of schooling (and the relatively different costs for different regions or groups) than it does with relaxing constraints that hold back progress. While offering COD Aid with more complex formulas is certainly worth considering, our conclusion from our consultations is that a single clear simple and transparent outcome indicator is more likely to succeed at getting the political and social attention needed to mobilize policy changes. Furthermore, by assuring a long-term commitment to reaching universal completion, the COD Aid incentive would not disappear once a certain “threshold” is achieved.
Measurement of the impact of COD Aid should take qualitative as well as quantitative targets into account. This recommendation addresses another important issue related to unintended and potentially negative consequences (a problem for all forms of aid and not just COD!). For example, in proposing a workable COD Aid agreement for education, we showed how COD Aid payments can be linked to a quantitative indicator while simultaneously strengthening civil society’s ability to monitor school quality.
The CAFOD policy brief not only puts important concerns on the table, but also opens further space for feedback and thoughtful consideration on how to move COD Aid forward in a positive way.
CGD vice president and senior fellow Todd Moss and reasearch assistant Lauren Young propose direct cash distribution of Ghana's oil profits to help the country avoid the natural resource curse. One positive effect of the plan would be to strenghten democratic pressure on the government to be good stewards of the resource.
A recent Economist on-line poll asked: Does the world have too many people? There was a predictable response: from their Blackberries or the comfort of their swivel chairs, 80% of Economist voters clicked on yes. You can be sure the respondents are neither the folks having lots of children, nor the ones suffering from the environmental impact of lots of people on the Earth. Yet the commentary accompanying the poll was intriguing, because the same people who agree that the world is over populated don’t agree about what that means, nor what to do about it.
Their disagreement may arise because important basic information about changes in fertility are poorly understood, even among the generally well-informed readers of the Economist. In my mind, the important questions are:
What are people’s fertility aspirations—that is, how many kids do people want?Why are people in different countries seemingly so different in this regard?
Contrary to the views of many economists, the answers to these questions suggest that reducing population growth rates involves much more than simply waiting for rising incomes to bring down fertility rates.
Diverging Fertility Rates in the Developing World
A quick look at how fertility changed over 35 years in developing countries reveals some surprises. In 1970, more than 120 low-income developing countries had total fertility rates (TFRs) that exceeded 4.5 children per woman. More than 80 of these countries had fertility rates that exceeded 6 children per woman, and four exceeded 8 children per woman (World Development Indicators, 2009).
Today, no country in the world has a TFR higher than 8, and only 12 have a TFR greater than six children per woman. Conversely, 131 countries have fertility rates lower than 3.5, more than double the number of countries in 1970. Yet many of these countries continue to be very poor.
The chart below shows this remarkable transformation for 100 developing countries for which we have good data. The vertical axis is total fertility, the horizontal axis is per capita income. All 100 countries began with high fertility and low income. Click on the arrow below the graph. The countries divide neatly into two groups: the green, with big reductions in fertility (but remaining poor), and blue, which show little progress on both measures.
There is strong regional flavor to the changes over time. By 2005, all but two of the remaining high-fertility countries are in Sub-Saharan Africa (those two are Timor-Leste and Yemen). The global percentage decline in fertility for this period was 86%. In East Asia fertility fell by 198%, in South Asia it fell by 92% and in Latin America it fell by 117%. Sub-Saharan Africa managed only a 29% fertility decline.
What makes Africa different? Nobody knows for sure. Possible answers include fertility desires, unmet need for contraception, economic structure, and persistent high poverty. Moreover, Africa is not one uniform place with one set of macro or population policies. Differences abound, and they matter for fertility. For example, South Africa and Swaziland have 70-80 percent modern contraceptive prevalence, whereas Niger and Burundi have remained near 10 percent. But the dots do tell a story, and the end is yet to be written.
Uptick in Fertility in High-Income Countries
If the story in the developing world is more diverse than usually recognized, the story in the high-income countries has taken a surprising twist.
It’s a shock to learn from an Economist story about a recent article in Nature (subscription required for Nature article) that in some rich countries a 40-year old trend of declining fertility is reversing.
The graph below presents the same relationship we showed above between fertility and wealth (this time the Human Development Index rather than per capita income,) for countries that were rich in 1975. The blue dots, indicating each country for 1975, show a strong downward slope: richer countries had lower fertility. But the red dots, indicating each country for 2005, show that once countries score 0.9 or higher on the HDI, fertility rises.
Cross-sectional relationship between TFR and HDI, 1975-2005.
From Nature, Myrskyla et al. 2009
What’s up with that? Could it be pro-natalist policies in countries worried about declining population? Maybe people recognize the improbability of social insurance to provide for their extended old-age? Regression to the mean of replacement level fertility? A shortage of family planning in the rich world? (just kidding about that one) Is it a natural biological phenomenon?
The Nature authors speculate there may be a biological response to environments that guarantee stability and comfort: people are so comfortable they want to share it with (more) children.
Just as in a real game of connect-the-dots, a picture will emerge as we try to tie together all of these points. Like the responses to the Economist poll, there may be one answer, and many different ways to get to it.
In all of last week’s hoopla in NYC with the United Nations General Assembly (UNGA) and the Clinton Global Initiative in full swing, news about an improved, composite U.N. entity for women (still to be formally named) went under the radar. The idea for consolidating several U.N. agencies into one has been in the works for about three years, but was finally adopted just two weeks ago. The resolution merely approves the creation of the entity and states that the Secretary General should announce the final plan for the structure and mission of the agency at next year’s UNGA. Now that’s classic UN style—to take one entire year to figure out what has already been figured out! It’s time for urgent and quick next steps, which if implemented smartly (not just politically) can make all the difference.
Secretary General Ban Ki-moon must move quickly and strategically to appoint a technically qualified, pragmatic, high-performing Under Secretary General (USG) to lead the agency. A few different proposals are circulating with suggestions for how the agency should be structured and purposed, but the process should be led by the new USG. Selecting a leader should be based not on national quotas, politics or horse-trading. We need a leader who:
Gets it: Technically, the leader should be an expert on global development and women and most importantly someone who can narrow the distance between a U.N. level agency decision/action and impact on communities on the ground, in villages, towns and cities.
Knows the ropes: Understands how the U.N. system does and does not work and can challenge the old way of doing things.
Has the vision and the smarts to get the job done: A pragmatic vision to drive an effective business strategy for an agency that will empower women in the world’s poorest communities.
The U.S. Government’s current and high level focus on women and girls in global development offers a perfect reform moment in the history of the U.N. and global development. The Secretary General must seize it now. The world cannot wait any longer.